The government of Belize has asked holders of its 2038 notes to accept changes in the amortization schedule and a reduction in coupon payments as part of a debt restructuring proposal.
The Central American sovereign issued $530m in 25-year bonds during an exchange offer for its 2029 notes in March 2013. The 2038s pay a 5% coupon, which goes up to 6.767% in August 2017.
Belize has requested bondholders agree to an annual fixed rate of 4%, beginning on February 20, until the bonds mature in 2038. The government also wants to change the amortization schedule to three equal annual payments in 2036, 2037 and 2038, rather than 38 semi-annual payments starting in 2019.
“The two amendments the government is proposing are, we believe, the mildest adjustments to the terms of the bonds that will still achieve the objective of putting the bonds on a fully sustainable basis,” said Joseph Waight, Belize’s financial secretary.
Belize is offering bondholders a consent fee of 0.25% on the 2038s. The offer expires on January 26.
“We have received it, we are studying it and we will share our views with the bondholder community as expeditiously as possible,” said Charles Blitzer of Blitzer consulting, which is a special adviser to the bondholder committee.
Last week, BNY Mellon, the official trustee on Belize’s superbond, officially recognized a bondholder committee, which will start talks with the government.
The committee was established in December with support from funds Greylock Capital Management, Grantham Mayo van Otterloo, Steadfast Insurance Company and Capital Markets Financial Services.
Bondholders on the committee have also retained Broadspan Capital as financial adviser. Porter Kaye Scholer is the legal adviser.